To use an old maxim: “physician, heal thyself.”
In the United Kingdom, where late payments run rampant, City A.M. reported that the Cabinet Office has not been paying its bills on time, despite having pledged to pay as much as 80 percent of invoices in five days and the remainder within 30 days. The publication noted data that shows late payments for that office stretching back to 2017, and well into the post-Carillion age — where, of course, late payments have grabbed headlines.
The stats, said City A.M., show that the Cabinet Office missed the 30-day window for as much as 10 percent of its payments all the way back to October 2017, and also missed the five-day window on roughly 25 percent of invoices since then. It should be noted that the Cabinet Office has been a critic of late payments, and Minister Oliver Dowden of the office has said that late payers should not be awarded government contracts.
In reference to the data publicized by City A.M., Jon Trickett, shadow minister for the Cabinet Office, said the numbers show a “worrying signal to businesses, [which] are looking to the Cabinet Office to provide leadership in addressing the problem of late payment.”
Separately, but also in the U.K., a “traffic light system” will debut to help illuminate who pays on time and who doesn’t — among large companies in the country. The plan will come courtesy of Small Business Commissioner Paul Uppal. The Sunday Times noted that the “red” signal will be used to publicize serial late offenders, and companies that do not post payment terms, as mandated in the U.K., twice per year. The site noted that, per the Federation of Small Businesses (FSB), about 84 percent of business owners are paid late.
The epidemic, reported by The Telegraph late last week, has spurred three quarters of 100 members of parliament to be queried in a survey to back fines for serial late payers, and to call for the Prompt Payment Code, heretofore voluntary, to be written into law. The Association of Accounting Technicians (AAT), which was behind the survey, said the government must stop “dragging its heels” on the issue.
In terms of individual company news, Jet Airways, the India-based carrier spotlighted in these digital pages in past weeks, is, as reported by Bloomberg, looking to negotiate with vendors. The company had said it would miss a debt payment last month and, amid late payments to its vendors, had been — and still is — struggling with a tough competitive landscape, where fares are being priced below cost, fuel payments are high and the rupee’s buying power is waning. This time around, said Bloomberg, the company is seeking to defer or reduce its payments owed to parts vendors, credit card companies and service providers. In November, the company posted a third-straight quarterly loss.
Here in the States, Sears, the once mighty retail icon, is in danger of liquidation as of Monday (Jan. 7), should there be no new movement on bankruptcy resolution. CNBC reported that Chairman Eddie Lampert has offered to pay as much as $4.4 billion to bring the firm out of bankruptcy through the ESL Investments hedge fund.
As CNBC reported, the money being offered is not enough to cover vendor payments that are owed. At this writing, a hearing loomed on Tuesday (Jan. 8) to accept the bid — or start liquidation proceedings. The creditors committee has called the move by Sears to stay in business “nothing more than wishful thinking,” as Bloomberg reported.